Rand Capital Receives $6 Million SBIC Funding Commitment
December 19 2018 - 10:02PM
Business Wire
- Debenture funding provided by U.S. Small Business
Administration
- Additional capital supports Rand’s growth strategy
Rand Capital Corporation (Nasdaq:RAND) (“Rand”), a venture
capital company which invests in growth businesses with unique
product, service or technology concepts, announced that it was
recently awarded a $6 million commitment for additional capital to
be issued to its wholly-owned subsidiary, Rand Capital SBIC, Inc.
The leverage commitment, granted by the U.S. Small Business
Administration (“SBA”), permits Rand SBIC to draw down capital, as
needed, for future investments through September 30, 2023. This new
debenture leverage will have a ten year maturity and will carry a
fixed market rate of interest, both of which are determined
following the dates of the capital draws.
Since the establishment of Rand SBIC in 2002, Rand has received
$18 million of SBA capital, of which it has repaid $10 million,
leaving $8 million of SBA debenture obligations currently
outstanding. These debentures have an average annual interest rate
of 3.6%, with scheduled maturities between 2022 and 2025. Following
a full draw down of the new $6 million SBA commitment, Rand SBIC’s
total outstanding debenture leverage would be $14 million.
Daniel P. Penberthy, Executive Vice President and Chief
Financial Officer of Rand, commented, “Rand and the SBA have a
shared mission of growing businesses and jobs. Access to this
additional capital allows us to further expand our portfolio in
support of advancing businesses. The SBA leverage is long-term
capital, however it does require semi-annual interest payments to
the SBA. Therefore Rand will continue its focus on current yield
debt investments in combination with growth equity to support this
new leverage funding.”
Allen F. (“Pete”) Grum, Rand’s President and Chief Executive
Officer, added, “While this capital commitment had taken some time
to receive, it demonstrates the SBA’s confidence in Rand and the
important role we serve in the funding cycle of young businesses in
underserved markets. We have a healthy pipeline of deserving
opportunities and believe that this new capital, combined with our
other strategic initiatives, will continue to drive shareholder
value.”
ABOUT RAND CAPITAL Rand Capital (Nasdaq:RAND) provides
investors the ability to participate in venture capital
opportunities through an investment in the Company’s stock. Rand is
a Business Development Company (BDC) with a wholly owned subsidiary
licensed by the U.S. Small Business Administration (SBA) as a Small
Business Investment Company (SBIC). Rand focuses its equity
investments in early or expansion stage companies and generally
lends to more mature companies. The Company seeks investment
opportunities in businesses with strong leaders who are bringing to
market new or unique products, technologies or services that have a
high potential for growth. Additional information can be found at
the Company’s website where it regularly posts information:
http://www.randcapital.com/.
Safe Harbor Statement This news release contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements concerning future net asset
value growth, investment returns and opportunities as well as
Rand’s plans for utilizing proceeds from sales of portfolio
companies when and if received. These statements involve known and
unknown risks, uncertainties and other factors that could cause the
actual results to differ materially from the results expressed or
implied by such statements, including general economic and business
conditions, conditions affecting the portfolio companies’ markets,
competitor responses, and market acceptance of their products and
services and other factors disclosed in the Corporation’s periodic
reports filed with the Securities and Exchange Commission.
Consequently, such forward-looking statements should be regarded as
the Corporation’s current plans, estimates and beliefs. The
Corporation assumes no obligation to update the forward-looking
information contained in this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20181220005159/en/
Allen F. ("Pete") Grum President and CEO Phone: 716.853.0802
Email: pgrum@randcapital.com
Investors: Deborah K. Pawlowski / Karen L. Howard Kei
Advisors LLC Phone: 716.843.3908 / 716.843.3942 Email:
dpawlowski@keiadvisors.com / khoward@keiadvisors.com
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